What you Need to Know for July 17th

Together With Shortcut

Welcome back. While you can look at the S&P and Nasdaq, and see a pretty standard year, looks can be deceiving.

Several of the high-flying AI names are off -30% or more (such as Micron), we’re hearing horror stories of korean retail levering up at the top, space stocks have fallen back down to earth (RocketLab is -54%, SpaceX is -35% off the highs), and even some of the historically high-growth tech names like Netflix are now re-rating due to lower growth prospects.

The narrative around AI is that investors wonder whether the massive spend will be worth it. Goldman CEO David Solomon himself believes we are in “the relative early innings of a very, very significant” AI infrastructure buildout, noting that he expects bumps and recalibrations along the way.

However, the big news yesterday was that a Chinese open source model, Kimi K3, was realized and it was beating or matching frontier models on important benchmarks. The commoditization of frontier model level work drives the whole ROI equation into question and has knock-on effects. We are still digesting the model and takeaways, but could have us heading towards another DeepSeek model. Still, it’s hard to imagine enterprise adoption of chinese models in the U.S. for a multitude of reasons…More below, and we’ll talk more on it on Sunday too.

Let’s get into it.

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Today’s Jobs:

1. Blackstone is hiring a PE Investor Product Strategy Associate (Miami)

2. Oaktree is hiring a Residential Credit Analyst, VP (NY)

3. Ares is hiring a PE Secondaries Associate (NY)

4. Apollo is hiring an IG Credit (Financials) Associate (London)

Earnings Corner 💸 

• Netflix $NFLX ( ▲ 0.91% ) revenue came in at $12.56B vs. $12.59B, while EPS beat at $0.80 vs. $0.79. The quarter was weighed down by slowing growth despite continued gains from membership, pricing, and advertising. Shares fell after third quarter revenue and EPS guidance missed expectations, reinforcing concerns that the company’s growth is moderating as the streaming business matures.

• ASML $ASML ( ▼ 1.68% ) revenue beat at €9.33B vs. €8.80B and EPS beat. Results were driven by surging AI-related demand for advanced logic and memory chips, as chipmakers accelerated capacity expansion and placed more orders for ASML's EUV lithography systems. Management raised 2026 sales guidance as exceptionally strong orders extended order visibility into 2028 and announced plans to increase EUV production capacity by roughly 30% in 2027 to help ease a key bottleneck in the AI chip supply chain.

• Johnson & Johnson $JNJ ( ▲ 1.19% ) revenue beat at $25.31B vs. $25.05B, while EPS beat at $2.90 vs. $2.85. Results were driven by strength in its medicines business, led by Tremfya, an autoimmune disease treatment, and Darzalex, a blood cancer drug, which helped offset declining Stelara sales following biosimilar competition. Management raised full year sales and EPS guidance despite softer MedTech results, as Impella heart pump sales declined after a U.K. study raised concerns about its use in certain high risk procedures, sending shares down after the print.

• Morgan Stanly $MS ( ▼ 4.45% ) revenue beat at $21.35B vs. $19.64B, while EPS beat at $3.46 vs. $2.94. The bank joined the broader Wall Street trading and dealmaking boom, with equities revenue jumping 69% on heightened market volatility and client activity, while investment banking revenue rose 58% as IPOs, M&A, and debt and equity issuance rebounded, partly fueled by the AI investment cycle. Wealth management also added a record $148.1B in net new assets, pushing total client assets to $10T, helped by stock-plan inflows from newly public companies. Management said AI-related capital spending could reach $10T over time, supporting continued financing and advisory activity.

• BlackRock $BLK ( ▼ 0.58% ) revenue beat at $7.08B vs. $6.82B, while EPS beat at $13.91 vs. $12.59. Results were driven by a strong equity market and continued demand for BlackRock’s investment products, as investors added $192B of net new assets, primarily into iShares ETFs and fixed income funds, pushing assets under management above $15T for the first time. Higher asset values, strong client inflows, and growth in higher fee private markets and technology services lifted fee revenue and margins, while management reaffirmed confidence in continued double digit earnings growth and increased its 2026 share buyback target to $2B.

• United Airlines $UAL ( ▼ 1.79% ) revenue beat at $17.67B vs. $17.61B, while adjusted EPS beat at $1.99 vs. $1.88. Results were driven by resilient travel demand and stronger pricing, with premium revenue up 16%, corporate travel up 27%, and loyalty and cargo revenue also growing as customers continued booking despite higher fares. Management raised full year EPS guidance to $9–$11, but warned that higher jet fuel prices are expected to add nearly $6B in costs this year, though the airline expects fare increases and disciplined capacity to recover 80%–90% of those costs in Q3.

• Taiwan Semiconductor $TSM ( ▼ 2.32% ) revenue beat by NT$1.27T vs. est. NT$1.264T, while EPS of NT$27.25 beat estimates. Results were driven by continued AI chip demand, as hyperscale customers increased spending on advanced semiconductors, supporting strong demand for TSMC’s leading-edge 2nm, 3nm, and 5nm process technologies. Management raised its 2026 revenue growth outlook to more than 40%, increased capital spending guidance to $60B–64B, announced an additional $100B investment in Arizona, and said it expects the multi year AI demand trend to remain strong. Shares fell despite the strong quarter, as expectations were already high following the stock’s strong rally, while management’s comments about softer consumer end markets tempered enthusiasm.

• UnitedHealth Group $UNH ( ▲ 1.16% ) revenue beat at $112.03B vs. est. $110.85B, while EPS beat at $6.38 vs. est. $4.90. Results were driven by better management of elevated medical costs, improving margins, and AI-powered operational efficiencies, while both UnitedHealthcare and Optum exceeded expectations. The company also posted a better than expected 86.7% medical benefit ratio, signaling improved cost control. Management raised its 2026 adjusted EPS guidance to $19.50–20.00, maintained revenue guidance above $439B, and said it expects to outperform that target.

• GE Aerospace $GEA ( 0.0% ) revenue beat at $13.35B vs. est. $11.91B, while EPS beat at $2.02 vs. est. $1.86. Results were driven by strong commercial aerospace demand, higher-margin aftermarket services, margin expansion, and improved free cash flow. Management raised its 2026 adjusted EPS guidance to $7.75 at the midpoint, reflecting continued confidence in aircraft demand and services growth. Despite the strong quarter, shares fell as expectations were already high.

On The Move 📈 📉

• AST SpaceMobile $ASTS ( ▼ 17.04% ) plunged after announcing a $1B convertible notes offering to fund satellite deployment, which triggered dilution concerns.

• Sweetgreen $SG ( ▼ 7.44% ) continued falling, bringing its weekly loss to 26% on fears that a cyclosporiasis outbreak tied to raw produce will dampen demand for salads and fresh greens.

• Staffing stocks $MAN ( ▲ 32.37% ) and $RHI ( ▲ 12.62% ) rallied after ManpowerGroup’s Q2 earnings blowout signaled improving demand across the sector. The beat was fueled by a recovery in US IT and RPO staffing.

• Abbott Laboratories $ABT ( ▲ 10.71% ) soared to its best day since 2002 after raising FY26 guidance on a Q2 revenue and profit beat, defying the Obamacare pressure that recently hit hospital operators.

• Space stocks $RKLB ( ▼ 11.61% ) and $PL ( ▼ 11.29% ) sank in a broader space sector selloff. Rocket Lab was dragged by a Piper Sandler Neutral initiation and Iridium acquisition concerns, while Planet Labs was hit by fears of dilution from a $1.5B equity offering.

• CareDx $CDNA ( ▲ 35.6% ) flew after Medicare finalized coverage for its transplant surveillance tests across kidney, heart, and lung transplant patients.

• Alphabet $GOOGL ( ▼ 4.44% ) fell after a Bloomberg report that Gemini 3.5 Pro is months behind schedule on coding capability shortfalls, with additional pressure from a broader semiconductor selloff.

IPO Roundup 📍 

• Wall Street’s largest banks posted their best equity underwriting quarter since 2021, fueled by SpaceX’s record IPO and the AI fundraising blitz. Equity-linked offerings are up 82% this year to $166.7B+, and momentum should continue with Anthropic’s potential October mega-IPO and AI spending projected to hit $1.3T next year.

  

• Csquare Inc. raised $1.05B in its IPO after pricing below range at $21 per share (vs $23-$27 marketed) for a ~$3.25B valuation. The Brookfield-backed data center operator, which runs 60+ sites across the US, Canada, and UK, plans to use proceeds to pay down its $771M revolving credit facility and a $75M Brookfield promissory note. Morgan Stanley, TD, Wells Fargo, BofA, BMO, and BNS led the offering.

• CXMT Corp. saw its $9.8B Shanghai IPO oversubscribed 212 times by retail investors with 9.4M individual orders, positioning what’s now the second-largest China listing ever. The DRAM chipmaker priced at 8.66 yuan per share for a ~580B yuan market cap, implying just 5.9x projected 2026 earnings versus a consensus 20x multiple.

• Braveheart Bio Inc. filed for a Nasdaq IPO Wednesday. The A16z-backed clinical-stage biotech, chaired by Biogen CEO Christopher Viehbacher, is developing lead drug BHB-1893 to treat hypertrophic cardiomyopathy and has raised $185M to date from investors including Patient Square Capital. Goldman Sachs, Jefferies, TD Cowen, Stifel, and Cantor are leading the offering.

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Today’s Headlines 📖🍿 

• Moonshot AI's Kimi K3 debuted at 57 on Artificial Analysis’ Intelligence Index, edging out Claude Opus 4.8 and GPT-5.6 Terra while scoring close to parity with Claude Fable 5. The 2.8T-parameter model is priced at $0.30/$3 per million input/output tokens, a fraction of Fable 5's $10/$50.

• Wildfire smoke from over 100 uncontrolled fires in Canada is blanketing the Midwest and Northeast with hazardous air quality expected through at least Friday night, compounded by a concurrent heat wave. Chicago’s AQI reached 597 and New York’s approached 150, prompting evacuations, mask distributions, and cooling centers, while Sunday's outdoor World Cup final in New Jersey remains uncertain.

• South Korea halted new listing of single-stock leveraged ETFs tied to Samsung and SK Hynix and raising minimum trading deposits from 10M won to 30M won after products tracking the two chipmakers grew to account for over 70% of trading value. The Kospi fell 6.4% Thursday and is down more than 25% from its June peak.

• King Street restricts withdrawals from its flagship hedge fund, moving existing investors into a separate vehicle that will liquidate assets over time, which founder Brian Higgins cites as having better exits. The fund has shrunk from $20B to $8B over the past decade, with more than 40% of the firm’s AUM in lower-fee CLOs.

• 57% of global insurers plan to increase private credit allocations over the next 12-24 months, up from 32% in 2024 with demand for the asset class outweighing public fixed income for the first time. This comes even as more than half of surveyed insurers flagged deteriorating underwriting standards and rising defaults.

• The Yankees are in talks with Apollo to raise $3B through a mostly debt-financed package, following Apollo’s launch of Apollo Sports Capital last year. This comes amid a broader wave of institutional capital in sports, with the firm purchasing a majority stake in Atlético de Madrid and the Seahawks’ $9.6B sale last week.

• Apple raised prices across Macs, iPads, Apple TV, HomePod, and Vision Pro, by $100-$300, citing a memory chip shortage from AI data center buildouts. The iPhone, Watch, and AirPods were notably excluded.

• Thoma Bravo LPs lost roughly $3B through equity co-investments in Thoma Bravo's failed Medallia buyout, while Thoma Bravo itself recorded a $2B write-down. CalPERS lost more than $100M, and Mubadala lost hundreds of millions after Thoma Bravo surrendered control of Medallia to a Blackstone-controlled lender last month.

• Hunter Point Capital and six other firms have joined Promote Giving, an Ares-backed initiative donating at least 5% of fund performance fees to charity, bringing the total to 15 asset managers representing over $44B in pledged assets. Ares estimates the initiative could generate $300-350M in donations over the next decade.

• The largest US banks (BofA, Wells Fargo, Citi, Goldman Sachs, and Morgan Stanley) cut over 10,000 jobs in Q2 2026, the sharpest drop since early 2020. The cuts came despite a blowout trading-driven quarter, marking three straight quarters of headcount declines. Only JPMorgan grew, and Wells Fargo executives have cited AI as an efficiency driver.

• BofA CEO Brian Moynihan joined Wall Street leaders warning about the risks of Anthropic’s Mythos AI model. He told Bloomberg TV that AI tools such as Mythos represent “a big change” in how fast they can expose vulnerabilities in bank systems. BofA is among a group of Wall Street firms with access to Mythos, using it to test their own systems.

• Private credit trading platform Tradable launched 14 deals worth $646M in the first four months of 2026, more than double all of 2025, as fund managers hunt for liquidity to meet heavy redemption requests. Coller Capital’s Ed Goldstein estimates secondary private credit trading has doubled annually for the past two years and called the shift “structural, not cyclical.”

• Apollo Global Management plans to invest up to $20B in private credit for Mexican infrastructure and other debt deals. Apollo is offering faster closings and longer terms than commercial or development banks, a perfect fit for President Claudia Sheinbaum’s push to bring private capital into infrastructure.

M&A Transactions💭 

Emerald Holding, a B2B event organizer, was acquired for $1.5B by Apollo Global Management. EV/EBITDA was 38.55x and EV/Revenue was 3.19x. Goldman Sachs, Solomon Partners, and William Blair advised on the sale.

Aethon Energy Management, operator of a private investment firm, was acquired for $7.5B by Mitsubishi (TKS: 8058).

Zembl, provider of energy brokerage services, was acquired for $250.0M by TPG.

Varthana, operator of a school loan company, has entered into a definitive agreement to be acquired for $9.67B by Home Credit India Finance.

Nuvalent (NAS: NUVL), a clinical-stage biopharmaceutical company, was acquired for $10.6B by GSK (LON: GSK). Centerview Partners and Jefferies advised on the sale.

Gooch & Housego (LON: GHH), provides photonics technologies, has entered into a definitive agreement to be acquired for GBP 345.6M by Arlington Capital Partners. EV/EBITDA was 16.08x and EV/Revenue was 2.12x. Investec and Rothschild & Co advised on the sale.

Delivery Hero (ETR: DHER), an online delivery demand aggregator, has reached a definitive agreement to be acquired for EUR 13.0B by Uber (NYS: UBER). J.P. Morgan advised on the sale.

Catalyst Pharmaceuticals (NAS: CPRX), a commercial-stage, patient-centric biopharmaceutical company, was acquired for $4.103B by Angelini Pharma. EV/EBITDA was 13.28x and EV/Revenue was 6.87x. J.P. Morgan advised on the sale.

Chart Industries, provide a variety of cryogenic equipment for storage, was acquired for $13.05B by Baker Hughes (NAS: BKR). EV/EBITDA was 26.29x and EV/Revenue was 3.15x. Wells Fargo advised on the sale.

SPR Therapeutics, developer of a peripheral nerve therapy platform, was acquired for $650.0M by Medtronic (NYS: MDT). Raymond James advised on the sale.

Private Placement Transactions💭 

Walden Robotics, manufacturer of robotics systems, raised $302.03M of Seed Funding led by Deviation Capital, Toyota Ventures, Toyota Motor, and Toyota Invention Partners at a pre-money valuation of $797.97M.

Spectro Cloud, developer of a Kubernetes enterprise management platform, raised $100.0M of venture funding led by Goldman Sachs Growth Equity at a pre-money valuation of $900.0M.

Neko Health, developer of a medical scanning technology, raised $700.0M of Series C venture funding led by Lightspeed Venture Partners and O.G. Venture Partners.

Emergent, developer of an autonomous coding agent, raised $130.0M of Series C venture funding led by Creaegis at a pre-money valuation of $1.37B.

Uala, developer of digital financial tools, raised $197.0M of venture funding led by Allianz X at a pre-money valuation of $3.0B.

Digital Asset, developer of a distributed ledger technology, raised $355.0M of Series F venture funding led by Andreessen Horowitz.

AdvanCell, operator of radiopharmaceutical therapies, raised $315.0M of Series D venture funding led by Ally Bridge Group and Alpha Wave Global.

Fireworks AI, developer of a generative AI platform, raised $1.51B of Series D venture funding led by TCV, Index Ventures, Atreides Management at a pre-money valuation of $16.0B.

Alpaca, developer of a modern brokerage platform, raised $135.0M of venture funding led by Peak XV Partners.

Odds of the Day 🍒 

Polymarket traders are pricing in a 58% chance of Spain winning the World Cup.

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